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Property Managers Grow with the Sinking Supply of Houses in Market
Property management business in the U.S is starting to see the dawn again. The surprising reason behind this rise is the leaning supply of the houses available for sale. The sale of the houses started to get weak around 2014’s final quarter.
The conditions responsible for the scarcity of the houses for sale are different depending upon the regions.
Since, lower mortgage rates allow the borrowers to own a house at an effective rate but due to slow pace of construction and rise in the occupancy rate in the single-family rental apartment have taken their toll on the houses available for sale. So, property managers are getting higher returns as the owners are raising the price of the rental apartments.
Not only this, but negative equity is also the reason for the discouragement in the selling of houses. Negative equity refers to the condition where you own more to the mortgage market than the house’s market value.
The numbers suggest that more than million houses are facing the threat of negative equity. As if this situation was not bad enough, the worst part is that many houses have equity value of less than 20 percent and in some horrific cases this value is as low as 5 percent.
This means that more than million houses will not be sold due to such terrible equities and owners would like to wait till the prices rise to the optimum level.
But, there are signs of hope as the policy setting committee of the Fed’s declared that the job market is improving and mortgage rates are likely to fall more in the time coming.
Owners of the low price houses have taken the worst hit of the negative equity situation and are suffering more loss the owners of the high price homes. Also, with the demand growing for buying the houses, the first-time buyers are looking for the low price houses which are not in ample number as the profit margin is very less as compared to high price homes.
So, as a favorable condition to the property managers, most of the first time buyers are likely to rent the accommodation than to purchase a high price house and all you need to do is pay attention to the publicity and marketing strategies.
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